INDONESIA, as the world’s largest producer of palm oil, relies on smallholders for 41% of its production, which significantly contributes to the country’s global market share of 59%.
As regulations and standards develop to address climate change and forest clearing, there is increasing urgency for companies and governments to ensure that necessary steps are taken to adapt to these changes.
PT Rea Kaltim Plantations (Rea) and its corporate partners are aware that independent farmers face significant challenges in carrying out their daily activities while trying to increase crop yields and also comply with increasingly stringent regulations.
As a result, it is conceivable that independent smallholders will be increasingly marginalized from the palm oil supply chain due to a lack of capacity and resources to comply with upcoming regulations, resulting in their productivity and profits decreasing further.
Responding to this problem, Rea and his partners launched a new program, namely Shines (Small Holder Inclusion for Ethical Sourcing), which will be implemented from 2025 to 2027.
The Shines Program aims to drive change in the palm oil industry by embracing shared responsibility and encouraging inclusivity across the value chain.
Through collaboration between Rea and its corporate partners, Shines is committed to empowering independent farmers by adopting an inclusive approach to achieving regulatory compliance and meeting market requirements such as the European Union Deforestation Regulation (EUDR).
The program will include technical training, knowledge transfer, and capacity and skills building to improve good plantation practices and sustainable best management in accordance with relevant regulations and standards.
“For independent smallholders, compliance with regulations can be seen as a very difficult challenge. Shines addresses this by equipping them with the skills and knowledge needed to meet ever-evolving regulations, such as the EUDR RSPO is proud to support initiatives like Shines that share responsibility for achieving the vision of sustainable palm oil production, while safeguarding the livelihoods of independent smallholders and enhancing their role. them in the supply chain,” said RSPO CEO Joseph D’Cruz.
The program targets to engage relevant stakeholders along Rea’s supply chain, from independent farmers and FFB processors (by Rea) to refineries and companies producing daily necessities (FMCG), to ensure that at least 600 independent farmers around Rea plantations in Kutai Kartanegara Regency, East Kalimantan, meet EUDR compliance and RSPO certification, in stages until 2027.
The Shines program goes beyond meeting regulatory compliance by taking a holistic approach. This program aims to maintain and preserve surrounding forests, protect natural ecosystems, and increase biodiversity connectivity in the landscape.
This can be achieved by promoting sustainable plantation practices. The joint effort of Rea and its corporate partners will also work to improve community livelihoods through the premiums they receive from the sale of palm fruit bunches.
“Involvement of independent farmers is key to sustainable development. Shines brings a strong business example that can unite stakeholders to drive positive change throughout the value chain,” said Rea’s Managing Director for Sustainability Affairs, Bremen.
Shines has four main focus areas, namely ensuring EUDR compliance and RSPO certification for 600 independent smallholders, collaborating with small farming communities to protect approximately 10,000 hectares of forest outside the Rea concession, and implementing alternative livelihood programs for communities in six target villages. (J-3)
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